Of the trillions of dollars moving around mortgage finance this year, no one source of capital has been more influential in the U.S. securitization market than the contribution by the pioneering U.S. taxpayer. Taxpayers made significant investments in the securitization industry this year, pledging over a trillion dollars to buy agency mortgage-backed securities (MBS) from Fannie Mae and Freddie Mac, support private investment in legacy commercial mortgage-backed securities (CMBS) and otherwise prop up the government-sponsored enterprises. A colorful portfolio The largest investment strategy pursued in 2009, the agency MBS-purchase program, was executed through the New York Federal Reserve Bank. Through this program, taxpayer dollars were promised to buy up to $1.25 trillion of agency MBS — and $175 billion of agency debt. Although for a while it remained unclear when this strategy would wind down, on Sept. 23, the program’s custodian, the Federal Reserve, announced that its MBS purchases would continue into 2009. And so continues the program, aiming to finish the purchases by the end of the first quarter in 2010. The Fed so far has purchased $959 billion of agency MBS, according to data available from Barclays Capital at the time this story was published. These purchases were focused mostly in Fannie Mae MBS (59 percent of net purchases), followed by Freddie Mac (33 percent) and Ginnie Mae (8 percent). TO READ THE FULL STORY, SUBSCRIBE NOW.